CHEROKEE NET UP 57.3% AS LICENSE ROSTER GROWS
NEW YORK — Cherokee Inc., owner of the Cherokee and Sideout brand names, reported expanded licensing representation activities as well as sharply higher revenues and earnings for the first quarter.
In the quarter ended April 29, net income rose 57.3 percent to $4.2 million, or 49 cents a share, from $2.6 million, or 30 cents, in the year-ago period.
Royalty revenues rose 38.8 percent in the quarter, to $9.6 million from $6.9 million.
While royalties generated by its own brands currently are its sole source of revenue, next year it expects to begin receiving commission income from the Mossimo brand in its licensing arrangement with Target.
The company, based in Van Nuys, Calif., said it’s expanding its roster of licensing clients.
“As a result of the success of our Retail Direct business model with our Cherokee and Sideout brands and our performance in engineering the recent Mossimo transaction, we recently entered into representation agreements with Maui & Sons Inc., and Aspen Licensing International Inc.,” said Robert Margolis, chairman and chief executive of Cherokee.
“Furthermore, we continue to be approached by both branded wholesalers and major retailers requesting our services to engineer concepts which we believe are designed to expand the profitability of their businesses.”
The firm reported that the aggregate wholesale volume of its 17 Cherokee licensees during the first quarter moved ahead 32 percent, to approximately $392 million.
Sideout’s 13 licensees had combined wholesale revenues of approximately $18.5 million during the quarter, an 85 percent increase.